“First Republic Bank’s Stock Collapse and Emergency Meetings with US Federal Reserve”

Investing.com – First Republic Bank’s stock collapses today, after announcing first-quarter results, and the bank lost 100 billion in deposits.

The Financial Times stated that the US Federal Reserve held emergency meetings with the bank, fearing the failure of a new US bank, after the relative stability witnessed by the market following the collapse of Silicon Valley.

The newspaper said that the liquidation taking place in the shares of the American bank is ringing alarm bells in Washington. He added that there have been meetings between officials from the White House, the Federal Reserve and the Treasury Department in recent days. The Biden administration is trying to control the crisis about which its fears are increasing, and the US administration believes that time is running out and the bank is close to failing to secure customer and investor deposits.

Bloomberg indicates that the bank is considering selling assets estimated at between 50 to 100 billion US dollars in securities and mortgages as part of a larger plan to improve the bank’s financial position, according to sources.

The sale helps reduce turmoil in the assets, and buyers include major US banks, and they receive warrants or preference shares as an incentive to buy assets above market value.

The sources added to Bloomberg that the US government may have to intervene to negotiate with major banks to restore stability to the First Republic, while the bank is trying to improve its conditions.